Christmas and New Year’s booking cancellations result in loss of Rs 200 crore for the hospitality industry
Cancellations of bookings for Christmas and New Years, as well as weddings and planned events, due to an increase in COVID-19 cases have so far resulted in a loss of around Rs 200 crore in the hospitality industry, the Federation of Hotel and Restaurant Associations of India (FHRAI) said Thursday.
Faced with uncertainty again with the increase in COVID-19 cases forcing states to impose restrictions, the industry fears there will be further business closures without government support.
âThere were a lot of celebrations, a lot of events that were planned (around the New Year). Now is the wedding season. Meetings and weddings have been canceled. The New Year and all those Christmas cancellations so far have cost the industry almost Rs 200 crore, âFHRAI Joint Honorary Secretary Pradeep Shetty told PTI.
On the impact of the spread of the Omicron variant, he said: âAs of the 25th (December), there has been a drastic drop in prices and occupancy rates at hotels in the city which have returned to pandemic levels of 10 percent to 15 percent. percent occupancy and rates also plummeted. Stating that restaurant attendance has declined significantly, Shetty said that even at 50% attendance, sales and revenues have now fallen to just 10-20% of what they were in December.
“In the vacation and resort areas which were also doing well, they fell below 50% occupancy,” he added.
Shetty said that after the second wave, starting in October 2021, there had been a steady increase in occupations, income and attendance at hotels and restaurants.
âBy mid-December (2021), the occupancy rate at resorts and vacation spots had already reached around 80 to 90 percent. In cities and corporate hotels it was around 50 percent. It was down from pre-COVID-19 levels, but these were only encouraging signs and even income rates were increasing, âhe said.
However, at present the industry is once again looking towards an uncertain future, he said.
âWe are keeping our fingers crossed that this (new wave of COVID-19) ends in a monthâ¦ it is a worrying and worrying situation. We are only hoping for now that if there is a shutdown we are allowed to keep it open.
âThere is a lot of anxiety, fear and worry as to what one would do because considerable capital was invested after two successive shutdowns to reopen and restart operations,â said Shetty.
Demand in the hospitality industry will be reduced in the fourth quarter of this fiscal year, at least in January 2022, according to the rating agency ICRA, due to the new wave of COVID-19 and the Omicron variant which is dampening sentiment.
With infections surging over the past week and several states imposing partial closures, hoteliers are seeing bookings cancellations in January 2022 and inquiries for the next few weeks have declined.
Shetty said industry players have also put a lot of effort into bringing back the workforce and taking out loans to restart operations are the two COVID-19 waves.
Seeking government support, he said, âThere will be closures and unproductive assets will increase unless the government and the finance ministry come up with another back-up plan or some sort of measure to mitigate these actions. The FHRAI wants the Center to offer borrowers in the hotel sector “a moratorium or extension of loan terms” and “some form of employee compensation support”, to overcome the current situation.
In addition, Shetty said some measures in terms of state-level relief on payment of such as property taxes would be helpful.